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Seeweekly news
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2005-11-18 |
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Datec Group Releases Third Quarter Results |
Datec Group Ltd., a leading provider of high-quality information technology and services in Australasia and the South Pacific, released its financial results for the 9 months ended September 30, 2005.
Datec's operating companies in seven of the nine countries in the Pacific region had record results in terms of revenue and profit; however, disappointing results from subsidiaries in Fiji and an extraordinary one off expense in PNG resulted in an overall loss. Despite revenue of $36.1 million in the 9 months to September 30, 2005, (9 months to September 30 2004 - $37.59 million), the company experienced a loss of $758,475. The poor operating result was the result of provisions made in the statement of earnings against inventory in Datec Fiji Ltd, and an extraordinary provision for long service leave taken in the accounts of Datec PNG Pty Ltd.
Also affecting the results have been expenses associated with the pending merger of Datec's operations as contemplated by the Plan of Arrangement approved by Datec Group shareholders on October 28, 2005.
Despite this, on a comparable basis after accounting for discontinued operations, Datec Groups revenue increased by 12% and its operating expenses reduced by 7.5%. Long term debt has been reduced by over 90%.
In the fourth quarter of 2004, Datec began aggressive initiatives to reorganize the business in a number of its operating subsidiaries.
"We have moved quickly to address operations with poor performance. Cost structures that were out of line with revenue have been reduced considerably or eliminated completely," said Casey O'Byrne, Chairman of Datec. "However, on the upside, last year we made a considerable reduction in long-term debt. We also saw positive results of our efforts to improve overall operating efficiencies, and we have seen substantial decreases in expenditures in all areas of the business. This augurs well for Datec's future."
Consolidated Financial Highlights
9 months ended September 31 2005 ($ Cdn)
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9 months to 9 months to Change
September September
2005 2004
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Revenue $36,106,840 $37,591,664 -4%
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Gross margin $17,145,227 $19,806,587 -13.4%
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Gross margin as a percentage of
revenue 47.5% 52.6%
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Operating expenses $17,090,561 $18,479,486 -7.5%
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Operating expenses as a percentage
of revenue 47.3% 49.2%
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Profit (Loss) from operations $(758,475) $849,581
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Profit (Loss) per share - basic $(0.03) $0.03
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Profit (Loss) per share - diluted $(0.03) $0.03
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Long-term debt $70,729 $1,542,285 -95.5%
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